THE Australian dollar entered the final week of May weaker on the back of further strong data on the US economy.
This provided a nervous currency outlook for the rest of the week ahead of the all-important Chinese Purchasing Manufacturing Index (PMI) data scheduled with this week’s opening.
Monday’s results were curiously mixed though. The initial update showed that China’s official PMI rose, beating market expectations and providing some optimism that the economy there may be stabilizing. However, the HSBC PMI also released on Monday reported a reading which was the worst since October last year indicating 49.2, down from an initial reading of 49.6.
Either way, the Australian dollar began June at its lowest level against the greenback for over a year following a torrid few weeks since the Reserve Bank reduced interest rates to a record low level.
Looking ahead, focus turns to the US Employment data scheduled to be released on Friday. Economists have suggested that powerhouse economy is said to have created 165 000 jobs in May. Should this be the case we could expect the US dollar to strengthen further against the Aussie.
Composed by Anton van Teylingen of 1st Contact Money Transfers
Exchange rates at GMT 09:00, 03 June 2013
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